Meeting strategic goals and pursuing the initiatives of your credit union is critical to its success. However, with the ebbs and flows of deposit trends and earnings levels, the ability to achieve these goals can be restricted by the level of the credit union's net worth. Catalyst Strategic Solutions’ Secondary Capital Program can provide a means of raising external capital through Secondary Capital or Subordinated Debt.

Low Income Designated (LID) credit unions have regulatory authority to issue Secondary Capital or Subordinated Debt that is permitted to count toward net worth for a specified period. However, this authority is based upon NCUA approval of a credit union's plan. Once approved, external capital debt notes are created and issued to lending (investing) credit unions.

Catalyst Strategic Solutions' Secondary Capital Program partners with credit unions through every step of the process.

The Secondary Capital Program involves multiple phases:

  • Discovery: During the discovery phase, Catalyst's team engages with your team to ensure we fully understand and appreciate your near-term and long-term strategic goals and vision.
  • Application Development: Based on in-depth discussion during the discovery phase, Catalyst's team begins crafting the formal application to NCUA on your behalf. During the application phase, we put your business plan to the test to ensure it is profitable and supports the issuance of external capital.
  • Due Diligence: While the NCUA is reviewing the application, Catalyst creates a due diligence package that will be provided to potential investors to support the sale. The due diligence package is extensive and will provide a strong view of your credit union’s financial strength, core values and plans to deploy the funds raised.
  • Issuance: Once the application is approved by NCUA, Catalyst shifts to the issuance phase of the process. With the due diligence package available, Catalyst Corporate's brokerage team begins contacting their pools of investors to find interested parties.

During the process, Catalyst Strategic Solutions is there to assist your credit union at every step. Our experienced team helps vet the strategy, addresses questions or concerns from NCUA as they arise and ensures your credit union meets NCUA's filing and notification requirements.

If your credit union is looking for a tool to help counteract the limitations imposed by capital levels or to achieve a level of growth beyond your current earnings level, Catalyst Strategic Solutions Secondary Capital Program may be an ideal fit. We can discuss your plans and determine whether this strategy is right for you and your credit union. Contact us today to learn how this powerful strategic tool can help take your credit union to the next level!